Laybuy speeds up credit reporting to better protect vulnerable consumers — Retail Technology Innovation Hub


Buy Now, Pay Later (BNPL) Laybuy says it will start sharing debt and payment information with credit reference agency Experian from September 1, in a move it says he, “protects vulnerable consumers by providing other lenders with a much more complete picture of an individual’s financial situation”.

Information provided to Experian includes both amounts due and payment status, including details of missed and overdue payments. This will be made available to other lenders when making credit decisions.

Gary Rohloff, Managing Director of Laybuy, said: “We are committed to being the leader in providing responsible and transparent credit, which is why the business is fitting to be one of the first suppliers to BNPL in the UK. Uni to start providing payment data to Experian.

“We don’t want anyone taking on debt they can’t afford, and that means making sure all lenders fully understand a consumer’s financial situation when considering extending credit.”

“Providing this wider range of data to Experian will mean that lenders will be able to make much more informed credit decisions by having greater visibility into how a customer is using Laybuy, including their total debt level and their ‘he repays on time.

“This will significantly improve transparency and means that any Laybuy customer who may be facing financial hardship or has a history of missing payments will be much less likely to be granted additional credit which could worsen their financial hardship.”

He adds that the decision to share data will not negatively impact a consumer’s credit rating at this stage, as it will be isolated.

“It will, however, give consumers who repay on time the opportunity to build a credit history. This will make it easier for them to access suitable credit facilities in the future without having to take on high-interest and high-risk debt,” he comments.

“For this reason, sharing data with Experian is a win-win for consumers. Not only does this provide better protection for vulnerable consumers, but it also allows those with limited credit histories to improve their credit scores.

Rohloff concludes: “For many people, the BNPL offers a safer alternative to credit cards, providing them with interest-free short-term credit and a structured repayment cycle. But it’s important to remember that it’s always about credit.

“That’s why we’ve checked the credit of every new customer since our UK launch in 2019, which helps inform responsible credit limit setting and sees around one in four applicants turn down an account. “

“Today’s announcement sees Laybuy providing even more comprehensive and ongoing data on our customers’ financial condition so that all lenders can make more informed and balanced credit decisions.”

“We took this step because we believe it’s the right thing to do. No one should be put in a position where they are offered debt they cannot afford. This will help prevent this from happening in the future and we encourage all other providers to follow our example.

Who? Attention

Earlier this year, which one? called for stronger safeguards to prevent online shoppers from choosing BNPL’s services to pay for products without knowing the risks.

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